The United States Securities and Exchange Commission (SEC) has officially dismissed its lawsuit against Binance, drawing a close to one of the most high-profile regulatory cases in the crypto industry’s recent history.
End of a Lengthy Legal Dispute
The voluntary dismissal, filed with prejudice on Thursday in the U.S. District Court for the District of Columbia, ensures the SEC cannot reopen the case in the future.
Filed in June 2023, the lawsuit, originally led by then-SEC Chair Gary Gensler, accused Binance of a range of infractions, including illegally providing services to U.S. customers, artificially inflating trading volumes, and mishandling customer funds. Central to the SEC’s allegations was the claim that Binance facilitated the trading of crypto assets considered unregistered securities, a legal position the agency had taken against other major exchanges such as Coinbase and Kraken.
In the original complaint, Gensler argued that Binance "attempted to evade U.S. securities laws by announcing sham controls that they disregarded behind the scenes" to retain access to large American investors.
Industry Reaction
The SEC’s move to drop the case comes months after proceedings were paused to reassess the regulatory landscape and the work of a dedicated crypto task force.
A Binance spokesperson hailed the dismissal as “a landmark moment,” noting:
“We’re deeply grateful to [SEC] Chairman Paul Atkins and the Trump administration for recognising that innovation can’t thrive under regulation by enforcement.”
The exchange, however, remains vigilant as regulatory scrutiny of the crypto sector continues, albeit in a changing environment.
Strategic Implications
The lawsuit’s dismissal marks more than just the conclusion of a legal battle; it signifies a broader policy pivot. The Trump administration has intensified efforts to position itself as supportive of digital asset innovation. In recent months, the Justice Department disbanded its crypto enforcement team, and the Commodity Futures Trading Commission (CFTC) leadership is set to change hands, with a venture capitalist known for crypto ties expected to take charge.
Background of Binance’s Legal Challenges
The SEC case was only part of Binance’s legal troubles in the United States. The exchange had previously settled with the Department of Justice for $4.3 billion over anti-money laundering and sanctions violations. It also agreed to a $2.85 billion settlement with the CFTC on related charges. Binance’s founder, Changpeng Zhao, pleaded guilty to one count of money laundering violations and served a four-month prison sentence. Though he stepped down as CEO, Zhao retains a majority stake in the company.
A Changing Enforcement Climate
The SEC’s decision to dismiss its Binance lawsuit follows similar moves involving other major players in the crypto space. Lawsuits against firms such as Ripple and Coinbase have also been shelved or restructured. This pattern reflects a strategic shift in Washington, with regulators taking a less confrontational stance toward the sector under new political leadership.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice
